Wallets Stay in Control, Not Pools
1inch has opened its Aqua protocol to the public, enabling a new approach to decentralized finance (DeFi) liquidity across 13 Ethereum Virtual Machine-compatible blockchains. Unlike conventional liquidity pools, Aqua allows providers to retain tokens directly in their wallets, only moving assets when a swap is actually executed. This means users maintain custody of their funds rather than depositing them into smart contracts or third-party pools—a notable shift from standard DeFi architecture.
Aqua operates as a registry, not a pool. According to decrypt.co, every trade is settled by a “verified counterparty”—typically a market maker or arbitrage bot that has been confirmed by 1inch, with on-chain enforcement at the moment of swap. This design keeps assets under user control until a matching transaction occurs, reducing the risk of smart contract exploits or pool failures that have plagued DeFi in recent years.
On paper, this approach promises more security and flexibility for experienced users—but it also means that fees aren’t guaranteed and market volatility can still impact outcomes.
One Wallet, Multiple Chains, Many Moves
The core innovation behind Aqua lies in allowing liquidity providers to back multiple trading strategies and positions using the same wallet balance. For example, a user holding $100,000 in tokens can simultaneously support three separate positions quoting up to a combined $300,000 in liquidity across different chains. However, Aqua’s system ensures that only assets physically present in the wallet can be used for settlement—if an attempted swap exceeds the actual balance, it reverts automatically.
Aqua is now live on blockchains including Ethereum, Base, BNB Chain, Arbitrum, and Robinhood Chain.
This multi-chain deployment means that users can manage positions spanning 13 EVM-compatible networks without moving funds between bridges or custodial solutions. The protocol’s onchain registry tracks all open positions against live wallet balances and supports atomic settlement: either the full trade executes instantly or nothing happens at all. Still, not every protocol is supported—access currently requires a 1inch-issued credential for resolvers such as verified market makers.
Eight Audits, Thirteen Chains, Zero Pools Locked
Before opening Aqua to all users on Tuesday, 1inch subjected the protocol to eight independent security audits by firms including OpenZeppelin and Nethermind. The project was first introduced last year with developer documentation and software libraries but remained closed to general users until this week. The public rollout comes after months of testing and review aimed at minimizing smart contract risks—a point stressed by 1inch co-founder Sergej Kunz when he emphasized that tokens “stay in the user’s wallet” throughout the process.
Aqua’s architecture eliminates the need for traditional pooled capital locked in contracts. Instead, liquidity is quoted directly against provider balances—meaning there are zero idle funds sitting vulnerable in external pools. While this reduces certain attack vectors common in DeFi hacks, it doesn’t eliminate price risk: providers can still face losses if prices move sharply before their orders are filled. 1inch itself warns that Aqua is primarily intended for experienced users who understand these risks.
See Also
Incentives Flow: $1.37M to Jumpstart Adoption
To accelerate adoption and seed initial liquidity activity on Aqua, 1inch has launched an incentive program totaling approximately $1.37 million over three months. This includes 10 million 1INCH tokens contributed by the 1inch Foundation—valued at about $870,000—and an additional $500,000 in USDC from the 1inch DAO. Rewards will be distributed through Merkl to qualifying liquidity providers who participate during the early phase.
The incentive structure aims to attract both individual market makers and institutional players seeking efficient cross-chain strategies without relinquishing custody of their assets. However, distribution of rewards remains subject to approval by tokenholder vote—a step that may affect how quickly large-scale liquidity migrates onto Aqua.
It’s unclear how quickly mainstream DeFi participants will embrace this model given its reliance on verified counterparties and advanced position management tools.
The Final Word
- •1inch's Aqua protocol launched publicly on June 4, 2024, across 13 EVM-compatible chains including Ethereum, Base, and Arbitrum.
- •Liquidity providers can use a single wallet balance (e.g., $100,000) to back multiple positions totaling up to $300,000 in quoted liquidity.
- •The launch includes an incentive program: 10 million 1INCH tokens and $500,000 USDC (about $1.37 million) distributed over three months.
Developments to follow
If 1inch tokenholders approve the pending vote to allocate 500,000 USDC and 10 million 1INCH tokens (worth about $1.37 million) as incentives for Aqua adoption, these rewards will be distributed over three months to liquidity providers across the 13 supported chains; if the vote fails, the incentive program's funding and timeline remain unclear.